Record CAC 40 dividend distributions: "The state is much greedy than shareholders"

You did not like this week the reactions to the study which showed that the dividends distributed by the CAC 40 companies had risen in 2017 to 57.4 billion euros.

Yes, so I'm not naive, these reactions for some scandalized were almost inevitable. Dropped like that, without decryption, without comparison, this figure seems gigantic.

But there have been comparisons: for example, this is the highest figure in 10 years.

Exactly, but precisely, what has happened for 10 years: the most serious crisis since the tragedy of 1929. All companies have suffered, they have seen their results plummet and their debt explode. And things have only improved for about 3 to 4 years. So, to the comma, the distribution of dividends to shareholders of the CAC 40 is about the same for four years. This relativise all the same the effect "wow" of this record!

But, in full crisis of the "yellow vests", it is a figure that falls badly.

Yes of course. Except again, if you put it in perspective. Not just in time, as I just did, but compared to what companies do with their profits. The dividend is the amount that a company pays to its shareholders, that is the fraction of its profit that a company pays to those who own it, its shareholders. And what's needed is to see what the company is doing with the rest of its sales and profits. And in particular, what it does vis-à-vis two other entities: its employees, and the state.

And here we have very precise figures that put the dramatic aspect of this dividend record into perspective. CAC 40 employees, for example, captured 71% of what the company generated as revenue. And this is normal, we know since Karl Marx: to run a capitalist business, you need capital (shareholders), and labor (employees). And these people sometimes touch in several ways: as employees (as we have seen), but also through employee profit sharing and share ownership (when it exists).

And the state? You said, there are two other entities: employees, and the state.

Well, he captures some of the wealth created through taxes, including of course the tax he takes on corporate profits. And in all, it's 20% of all the wealth created, all the turnover. It was for example 66 billion in 2016 to compare with the 57.4 billion dividends. Here it is, the state is much greedy than the shareholders.
Who take 9%?

Exactly: 71% for employees, 20% for the state, remains 9% of the wealth created that goes to the shareholders. You see, it's arithmetic and it relativizes the record. Then, afterwards, we can make a moral judgment on these sums. We can also say that employees should have more, or that the company should keep a larger share of its profits to reinvest, to finance its research, innovation, growth. But here, there are as many strategies as there are companies. And then, let's not forget: the year 2018 was the worst on the stock market for 10 years for shareholders. Dividends also serve that purpose: to keep shareholders, even when the financial markets are moving.